Video: FEMA wants undeserved aid back

NEW ORLEANS — Some $6.8 billion was given out in disaster relief funds last year following Hurricanes Katrina and Rita. The Federal Emergency Management Agency says some of the 1.7 million households that got relief money didn't deserve it. Now FEMA is trying to get the money back. How did this happen in the first place? Was it fraud, mismanagement or both?

Isaac Delandra is one of those who got $2,000 from FEMA after his home was flooded.

“The thing about it, we needed clothes because we left here with just the clothes on our back,” he says.

The Delandras are like hundreds of thousands of families that legitimately got hurricane relief money after the storms.

But there were problems, admits FEMA. Based on an audit, it says 2 to 3 percent of households that got relief money probably didn't deserve it. And now FEMA is sending out a letter to about 51,000 families asking for the money back — up to $100 million.

“If we err on the side of helping people and have to ask for it back later, that's what we're doing now,” says FEMA spokesman Marty Bahamonde.

Authorities say this kind of thing has happened before, but never in this magnitude — a reflection of the scale of the disaster.

The Government Accountability Office (GAO) alleges fraud, for one thing. Thousands submitted duplicate or false Social Security numbers — and in other cases, relief money was paid twice to the same family. But the GAO says FEMA is also to blame.

“We don't think it's inconsistent to have fraud prevention controls in place at the same time as providing relief to those that are truly deserving of the relief in a timely manner,” says GAO Managing Director Gregory Kutz.

In a statement, FEMA's acting director, David Paulison, said FEMA hopes to stop this from happening in the future, adding, “For every instance of incorrect payment, there are thousands who are genuinely in need of the federal government's help. It is our job to ensure there is not delay in receiving that assistance.”

FEMA is giving people 30 days to pay back the money.

“If you committed fraud to take the money,” says U.S. attorney David Dugas with the Middle District of Louisiana, “we're going to make a case, and we're going to prosecute.”

As this year's hurricane season approaches, FEMA says it's putting in additional checks and balances to help make sure that all those who get its relief money deserve it.